LI golf course business in the rough

In an effort to draw membership, Island's End Golf & Country Club in Greenport this year began marketing an annual membership for $3,950. Previously, membership required buying an equity stake in the club that costs about $15,000 and was once as high as $40,000. (April 3, 2013) Photo Credit: Randee Daddona

In an effort to draw membership, Island's End Golf & Country Club in Greenport this year began marketing an annual membership for $3,950. Previously, membership required buying an equity stake in the club that costs about $15,000 and was once as high as $40,000. (April 3, 2013) (Credit: Randee Daddona)

The business of golf on Long Island -- home to celebrated courses such as Bethpage Black, Shinnecock Hills and Sebonack, where the U.S. Women's Open plays in June -- is shrinking because of overbuilding, a weak economy and shifting leisure pursuits. The Island has 127 golf facilities now, according to the National Golf Foundation, two fewer than in 2004, the peak year nationwide for golf courses....

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The business of golf on Long Island -- home to celebrated courses such as Bethpage Black, Shinnecock Hills and Sebonack, where the U.S. Women's Open plays in June -- is shrinking because of overbuilding, a weak economy and shifting leisure pursuits.

The Island has 127 golf facilities now, according to the National Golf Foundation, two fewer than in 2004, the peak year nationwide for golf courses. Links at Shirley closed in 2010 and Middle Bay Country Club closed this year.

In 1998, golfers played 576,850 rounds at those public courses. Game play slid by 19 percent in the next 10 years to 466,343 rounds -- and fell even more after the financial crisis of 2008, dropping to 369,595 rounds last year.

Falling demand for golf means many courses are scrambling for customers. They have offered discounts to drum up more business, said Kevin Law, president and chief executive of the Long Island Association, the Island's largest business group.

Woodside Acres Golf & Country Club, for example, is offering $1,200 off a $12,000 individual membership.

The Island's End Golf & Country Club in Greenport this year began marketing an annual membership for $3,950. Previously, membership required buying an equity stake in the club that costs about $15,000 and was once as high as $40,000.

"Everything in the golf industry has come down in the last 15 years," said Bill Fish, head pro at the club. "The horizon's in front of us, and we're trying to maintain a level of success here financially, and it's in jeopardy like everywhere else."

Demand for golf is falling for reasons both economic and social. In a 2010 study, the National Golf Foundation said courses built in the 1960s tended to be affordable public facilities, while courses built three decades later were likely to be high-end daily-fee courses -- with higher prices -- or created as part of gated communities.

Today, younger professionals look at clubs differently than their parents. "Young parents -- all the statistics show that they're spending a lot more time with their children," said Jay Mottola, executive director of the Metropolitan Golf Association.

In the past, the family might join a club and the father would play on the weekends, and the mother might play during the week, he said.

Now, it's more "two-income households where the shared time is shared time on the weekends, not the way it might have been a generation ago. That impacts the way people use private clubs."

"It's not only they're competing with golf courses, but they're also competing with other leisure pursuits," said Michael Halchak, an analyst at Standard & Poor's who covers golf course companies.

The shrinking of the game of golf -- which is going on nationally as well as locally -- is a striking turnabout for a sport whose growth once seemed as unstoppable as Tiger Woods in his prime.

The number of golfers in the United States grew from about 20 million in the mid 1980s to roughly 30 million in 2001, according to the National Golf Foundation, which uses survey data collected by the Physical Activity Council, a partnership of sports associations. The partnership asks 40,000 people in the United State about their participation in athletic and fitness activities.

On Long Island, and in the metropolitan area generally, the construction of golf courses boomed as the '80s came to a close. Landowners who saw dollar signs in the growing golf craze adopted the idea that if they built courses, golfers would come.

In the '80s and '90s "there were stories . . . of people moving out to the East End of Long Island and not being able to join clubs because all those clubs were full," said Charles Robson, executive director of the Professional Golf Association's branch for the metropolitan area. Golfers were waiting on line at Bethpage five or six hours to get on the green, he said.

But over the next decade, the number of players nationally fell by about 4 million to 25.7 million in 2011, according to the National Golf Foundation. And on Long Island, a shortage of greens turned into a glut.

"Unfortunately, what happened was we had so much growth," Robson said. "One new facility would have been perfect. Two or three would have been OK, but when you build five or six new public courses in a fairly small geographical area -- and again the game wasn't growing at the rate that people projected -- there was a downturn."

Jonathan Miller, president and chief executive of Miller Samuel, a real estate appraisal firm, said, "We overbuilt just at the same time that the number of rounds is decreasing. We're in the same situation as many places throughout the country."

Economic changes

One phenomenon that has also taken a hit is the "golfdominium." In these kinds of communities, residents live around a course to which they belong; along with a mortgage and property taxes, they pay golf membership fees.

"The economics of golf have completely changed," Miller said. "The idea that you could grab open space and sell high-end real estate and homes around the courses -- that has become very difficult with the housing collapse."

The housing crash, however, has in some cases preserved golf courses that otherwise might have been developed into housing.

"The fortunate thing is, from a golf perspective, that the housing market is not very attractive right now," Robson said. "Where in the past if you go back . . . 40, 50, 60 years ago where some of our clubs, especially the ones in Queens and western Nassau were sold off originally for either housing or roads and what not, right now is not a great time to buy 150 acres and build 150 homes and try to sell those."

Golf remains a key lubricant for business on Long Island. "When you spend six hours with somebody and then go have a beer afterward, it's a really good bonding opportunity with people," Law said. "A lot of things that get done here are based on relationships."

And despite its decline, golf remains big business. A 2012 report by the trade group Golf 20/20 showed that the industry generated $68.8 billion in the United States in 2011. But that's still a fall from 2000 when the industry generated $81.2 billion in inflation-adjusted dollars.

Steven Smith, executive director of the Long Island Golf Association, said the future of golf, in part, depends on efforts to attract a younger generation into the sport.

"As people get older, they play less golf," he said, "and obviously the future of the industry depends on people coming into the game."